AMERICAN MOTOR TRADE.

Taranaki Daily News, 26 January 1921, Page 8

AMERICAN MOTOR TRADE.

NO CHEAP CARS YET. BUSINESS MAN’S IMPRESSIONS. American-made motpr-cars are not likely to be reduced in price for two or three years, stated Mr. D. Crozier, a Christchurch business man, who has just returned from a trip to the United States. Mr. Crozier said there had been a boom in the United States motor trade since the war, followed by a pronounced slump, and manufacturers now were seeking only to fill present requirements. If the country recovered quickly from the slump there would be a great shortage of cars and prices would not tend to come down. “When I arrived in America, instead of finding the factories going at full blast, I found only hundreds of men working when there should have been thousands,” said Mr. Crozier. “One would think from that that there would be a reduction in prices, but, instead, it is going to have the reverse effect. The prices have been only slightly increased over pre-war rates—slightly, that is, as compared with lines such as clothing and boot's, as the production was increased so enormously during the boom that manufacturers were able to make the car cheaper on account of the lessening of overhead charges per car. Now, however, that the factories are working only half the staffs and the same overhead charges have to be borne by a lessened output, the cost of production per car is naturally greatly increased. This increase is accentuated by the -fact that many manufacturers have on hand large supplies of material bought at high prices.”

To explain the present conditions it was necessary to go back some time, Mr. Crozier stated. When the United States entered the war the Government placed an embargo upon the manufacture of cars, so that for practically two years there were very few cars available. In the meantime the American workman became very prosperous. The working man’s car became as much a byword in the United States as did the munition girls’ fur coats in England. After the war, when the motor manufacturers resumed production again they were “swamped” with orders, receiving many more than they could possibly fulfil. The boom had been followed in the natural sequence by a slump and the slump had been accentuated in the United States by the stopping by the Federal Reserve Board—the institution that practically controlled the financial situ zation —of advances on a great 'many lines, including motors. Mr. Crozier stated that the slump was more noticeable in the eastern and manufacturing States than in the west, where agriculture was the foremost pursuit. “If America recovers from the slump as quickly,as some expect there is going to <i)e a great shortage of cars,” he added, “and I am of the opinion that she will make a quick recovery. All over the United States at present a readjustment of the wages basis is being made. The men at present unemployed will resume work at a lower rate of wages. They appear to accept the situation as the natural one. I saw no signs <of labor unrest. With the reduction in the prices of the necessaries of life I think the United States will recover more quickly than any European country. For tha‘ reason I am convinced, in addition, that New Zealand will also recover quickly. American experience having proved that agricultural States are more buoyant than manufacturing States.”